Dealing w/ Prepaid Rent in Buildium

[Eric Boyd]

Hi all:

I've posed this question to the Buildium Support Team, but I wanted to get your opinion as actual users.  Here is how I posed the question to them:

On rare occasions, we have new tenants who like to pay a few months of rent, in advance. In order to keep from sending this advance rent to the owner, we apply it to 'advance rent' on the ledger, even though it still resides in the same account as regular rent payments. Inevitably, when the rent would normally be applied to the rent charge for the month, I forget to make the adjustment to apply the rent and the tenant gets the late charge notification email. So, then I go back to the tenant's ledger and adjust the ledger for that original payment so it's on the 'rent' account and not the 'advance rent' account. But, the problem then is that the rent shows as being received way back then, and when the management fees are calculated, it won't pick up that payment for the current month. What's the best way to handle advance rent?

What's your response to this?

Thanks,

 
- -
Eric M. Boyd, Owner/Broker
Step One Realty, LLC
Jacksonville, FL
Residential Sales and Property Management
http://www.StepOneRealty.com
cell: 904-813-5010 fax: 888-345-5054
mailto:Eric...@StepOneRealty.com

[JoanAlyce Lugert]

Is there a reason why you do not want to send the advance rent to the owner ?  

Unless you are concerned about an owner foreclosing, I don't see any reason not to disburse it to the owner.  Would love to hear your take on this.

Thanks

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Lugert Realty, LLC - Shamrock Property Management 
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[Eric Boyd]

Thank you, JoanAlyce.

 

I don't want to send the owner the advance rent because the rent income is not yet earned.  Rent is due and payable on a monthly basis.  I'm not generally concerned about an owner doing a "take the money and run" on me.  :-)

 
- -
Eric M. Boyd, Owner/Broker
Step One Realty, LLC
Jacksonville, FL
Residential Sales and Property Management
http://www.StepOneRealty.com
cell: 904-813-5010 fax: 888-345-5054
mailto:Eric...@StepOneRealty.com

[Tim Hendricks]

I post the rent to the Prepaid Rent Account (set up as a liability account, not income) when it's first paid in (you have to post a charge for whatever they are paying then apply a payment to it). When the first of the month rolls around, you transfer funds from the prepaid rent account to Rent Income. It collects management fees properly as the payment does not hit the commission able account (Rent) until the current month. Use the Withhold Deposit button on the lease ledger page to move the funds. 

I don't have a good solution for remembering to effect the transfer. I have a recurring task that is set up in Buildium to remind me to complete it. 

Hope this helps,

Tim

[Eric Boyd]

Tim,

 

When you say, "you transfer funds from the prepaid rent account to Rent Income," what method do you use for the transfer?  When I accept the prepaid rent, I deposit the check and hold it in the "rents" account with the regular rent payments.  So, when you say "transfer funds", are you using the Withhold Deposit, as stated.  Just trying to clarify.

 

Thanks,

 
- -
Eric M. Boyd, Owner/Broker
Step One Realty, LLC
Jacksonville, FL
Residential Sales and Property Management
http://www.StepOneRealty.com
cell: 904-813-5010 fax: 888-345-5054
mailto:Eric...@StepOneRealty.com

[Eric Boyd]

By the way, see attached picture.  This is what the tenant's ledger looks like right now.

 
- -
Eric M. Boyd, Owner/Broker
Step One Realty, LLC
Jacksonville, FL
Residential Sales and Property Management
http://www.StepOneRealty.com
cell: 904-813-5010 fax: 888-345-5054
mailto:Eric...@StepOneRealty.com

[Tim Hendricks]

Yes, I use the Withhold Deposit function. That allows a transfer from a liability account to an income account within Buildium. You can put the funds in the same bank account as your rents, but they need to be in a separate account within Buildium. I have 3 liability accounts (Sec Deposit, Pet Deposit, and Prepaid Rent), but all that money sits in the same bank account.